The Government of Gujarat is implementing certain measures that will bolster the production of crops, thereby helping farmers earn profits

Despite Gujarat being a drought prone region, farmers in the arid land strive to cultivate crops such as wheat, banana, papaya, sugarcane, tomatoes, paddy, millet and cotton. Saurashtra and Kutch regions have completely transformed from being a partly salty and marshy region to a rapidly growing agricultural land. It has been noted that the agricultural growth of Gujarat has been 9.6% on a year-on-year (y-o-y) basis in the last decade, exceeding India’s y-o-y agricultural growth rate of 2.9%.

Nitin Thakkar, CEO of Yogi Corporation

The agricultural sector in Gujarat could prosper due to several factors including good monsoon showers, rise in the minimum support price (MSP) provided by the Centre to aid farmers to sell their products at high rates and high cultivation of BT cotton that is regarded as a profitable cash crop in India, among others. Although these factors are available in most of the states in India, Gujarat outshines other states owing to its innovative marketing skills.

Govt initiatives

In 2004-05, companies in Gujarat were permitted to purchase crops from cultivators about a year in advance. This gave birth to the concept of contract farming in the state, which proved to be beneficial for farmers as they were provided with an assured minimum price and payments were increased in case of a hike in prices during the time of transaction. As a result, farmers continued to earn high profit margins throughout the year. This further minimised the difference in the farm gate prices, thereby lowering the inflation rates in the domestic retail market. With the farmers entering the market, consumers are also be benefited as there is adequate supply of agro products in the state at reasonable rates.

The profits earned by the Gujarat farmers are utilised to purchase latest machinery that can further improve the productivity of crops in the state. They may also buy superior quality seeds that would result in high quality produce, thereby helping them to fetch higher income from the market.

Cash crops boosting profits

Gujarat is one of the leading producers of cash crops like cotton in the domestic market. The state produces medium and long variety of cotton that are of superior quality. It has been noted that the mill owners in the state utilise the medium short fibre variety to manufacture cotton garments that are sold in the retail market. It has been noted that almost 80% of the cotton is sold to the spinning or yarn manufacturing companies in Haryana and Tamil Nadu, which is further providing a fillip to the profit margins of cotton cultivators in Gujarat.

With the increase in fertile fields, the productivity of crops has been boosted. This has further enabled traders to export the produce in the global markets and fetch higher profits. Importation of agro produce and other cash crops has also been minimised, thereby bringing down retail prices of the products sold to domestic consumers.  As a result, this would not only prove to be beneficial for consumers in the state but also for consumers across the country. 

Nitin Thakkar, CEO of Yogi Corporation, a mid-sized agro products supplier and exporter in Ahmedabad